Citizens Benefit from Lower Flood Insurance Premiums – City of Houston Awarded Class 5 Rating
- Effective October 1, 2009, many flood insurance policyholders in Houston realized reductions in premiums because the City of Houston earned an improved class rating from the National Flood Insurance Program (NFIP) Community Rating System (CRS). Currently, Houston is the largest city in the country to have achieved a Class 5 rating. The CRS Program was created to recognize communities where floodplain management standards exceed the minimum federal requirements and, in exchange, policyholders receive discounts on their flood insurance premiums.
- Communities must actively apply for a rating and are awarded a class rating from 10 to 1, with 1 being the highest achievable rating. Flood insurance policyholders located in the special flood hazard area (SFHA), or 100-year floodplain, receive discounts on their premiums based on the class rating. Policyholders located outside of the SFHA may also be eligible for discounts if they are not already paying at the preferred rate, which is the lowest possible rate offered under the NFIP.
- Houston entered the CRS Program in 2001 and was awarded a Class 8 rating effective May, 2002. At that time, Houston was the largest city in the nation to be awarded a Class 8. A modification to a Class 7 became effective May 1, 2006, and a five-year re-verification visit in 2006 resulted in Houston improving to a Class 6 rating, effective October 1, 2007.
- The latest class rating improvement gives policyholders located in the SFHA an additional 5% savings on their flood insurance premiums for a total discount of 25%.Policyholders located outside the SFHA continue to receive premium discounts of up to 10%, which is the largest discount available outside the SFHA.
- As of January, 2011, policyholders located within the SFHA are saving approximately $9.6 million annually, with those located outside the SFHA saving an additional $1.2 million, on flood insurance premium cost due to the City's participation in the CRS Program with a Class 5 rating.
- While there are approximately 20,000 communities nationwide participating in the NFIP, only 1,279 of these communities are participating in the CRS Program. As a Class 5 community, Houston has a better rating than 95% of the 1,279 participating CRS communities in the country. Of the 52 CRS communities in Texas, 15% are a Class 9, 33% are a Class 8, 33% are a Class 7, 12% are a Class 6, and 7% are a Class 5. For all of the CRS communities in Texas, there is a total of over $16 million in annual premium savings with 66% of that amount being realized by policyholders in Houston.
- Flooding can happen anywhere in Houston, and everyone lives in a potential flood zone even if they do not live in a floodplain. Approximately two-thirds of all flood losses from Tropical Storm Allison in 2001 occurred outside the mapped 100-year floodplain, and nationally, approximately one-third of all flood losses occur outside the mapped floodplain. [Source: Harris County Flood Control District]
- Your property is still at risk even if it is not located in the floodplain; so all property owners should obtain flood insurance. Flood coverage is not included in the standard homeowner's policy. It is sold through private insurance companies and backed by the federal government. Contact your insurance agent to purchase flood insurance and to receive information about how the City of Houston CRS rating affects your premium for existing coverage. When you purchase flood insurance there is a 30-day waiting period before it becomes effective. Do not wait to purchase insurance until there is a storm in the Gulf, because you may be too late to obtain coverage for that event.
Visit www.floodsmart.gov for more information on flood insurance and flood zones.